Fiscal Cliff Predictions

SS is a ponzi scheme, regardless of whether you believe it has a surplus. What is the wisdom of the fed govt forcing citizens to participate in it's lousy 'retirement plan', which the govt then raids, leaving IOUs? Can you imagine the prison sentences that's be handed down if Vanguard or Fidelity or your 401k adminstrator monkeyed around with your pension or retirement accounts like Uncle Sam does?

Cap benefits for those that don't need it so much?? Wow. Why not just garnish wages of 'those who don't need it so much'? Hell, just take their money. Amerika has bills to pay & we'll decide how much of your $$ you need. Wow

Your compassion for low income people who are somehow unable to save - despite the millions of low income people who saved $$ throughout history & eventually became middle class & sometimes even rich, is so touching. And your presumed generosity with other people's money is kind.

I'd just like to know goes on in your head - or heart - that causes you to believe it's perfectly acceptable to walk up to some hard working dude, rip out his wallet & take his cash, keep $100 for yourself for 'processing & admin', then give $100 to some poor person who is unable to save...or work...or look for work....or stay sober...or clean up after themselves...or refrain from committing crimes. This is what the fed govt does, in essence.

I could almost excuse believing in wealth redistribution if you were some Mother Teresa type, committed to helping the poor with your personal funds & resources. But that's not how liberals work. They're almost always cheap SOBs who only reluctantly give a few $$ to charity or personally help a few token poor people when they run for high office & realize their lack of generosity will be a political liability.

No, you're wrong.

My name is Lance wrote:

SS is a ponzi scheme, regardless of whether you believe it has a surplus. What is the wisdom of the fed govt forcing citizens to participate in it's lousy 'retirement plan', which the govt then raids, leaving IOUs?

social security is a welfare program, not a retirement plan, and it is a wildly successful welfare program. the "wisdom" of such a program is that as we have moved into a modern civilization, traditional notions of families and small villages caring for non-working elderly are no longer sufficient to ensure the well being of that class of people.

here's one paper, among many, that performs a fairly sophisticated analysis of the interaction of social security and poverty among the elderly. in the introduction, they say:

"The official poverty rate of those 65 years and older was 35 percent in 1960, more than twice that of the non-elderly (those 18-64), and had fallen to 10 percent by 1995, below that for the non-elderly. Smolensky, Danziger and Gottschalk (1988) found similar steep declines in elderly poverty back to 1939. This poverty reduction exceeded that for any other group in society."

judging by your not-so-polite rhetoric about government assistance for impoverished people, you probably don't much like a program like this one. that's fine of course for you to have that opinion. calling it a "ponzi scheme" and comparing it to theft or your silly vanguard/fidelity comments - well, that's just stupid.

They wouldn't pay a steep price either way. Tantrums and hostage taking and they'll further marginalize themselves. Or, they could be responsible and specify which spending cuts and tax loopholes they want eliminated as part of a broader deal. And, failure of previous grand bargain talks (vols. 1 & 2) could more easily be put down to Boehner's inability to bring his own caucus around. No one should bail on the possibility of reaching a grand bargain in the near future though. There's enough will on both sides to improve things.

Sagarin wrote:

The GOP is going to pay a steep price no matter what they do. So they should back the president into a corner. Interesting that Rubio voted "No." We need to deleverage, and the longer we put this off, the more painful the medicine will ultimately be. The president's idea of a grand bargain is more tax hikes in exchange for minor spending cuts, no real fiscal reform, and minor revisions to entitlements. Hell, he wouldn't even take up the idea of using a different inflation gauge for future projections, which was a Democratic proposal to begin with. Oh, he may fly around in Air Force One to exotic golf locations a little less as part of the arrangement. Maybe cut one trip per year.

where did you go, lance?

i've been waiting on the edge of my seat for you to claim that $250 billion per year of tax cuts is not tax cutting on a "grand scale".

"..i am not tied to any particular mechanism of raising revenue. it could be a carbon tax, a VAT or other consumption tax, revenue from a cap and trade system.."

Not sure I follow why you feel the need for a 'mechanism'. You obviously feel the fed govt should have more of our money - as if $2T/yr. isn't enough to live on.. - so why don't you & yours simply write checks to the US Treasury? If paying more taxes is the responsible, fiscally sound thing to do, why do you sit back & wait to be forced to do so by some 'mechanism'? Put your money where your mouth is, comrade.

it's eye opening to come here & read what actual voters take the time to post. Barry has spent us into oblivion, yet you champion him as a tax cutter. And you're so smug in your ignorance!

If I give you $5 before I beat the sh&t out of you with a lead pipe, am I a philanthropist or a thug?

wow..

My name is Lance wrote:

it's eye opening to come here & read what actual voters take the time to post. Barry has spent us into oblivion, yet you champion him as a tax cutter. And you're so smug in your ignorance!

If I give you $5 before I beat the sh&t out of you with a lead pipe, am I a philanthropist or a thug?

wow..

wait, let's be clear here, have you abandoned your claim that i am a moron because i believe obama cut taxes in his first term?

are you now admitting that he did in fact significantly cut taxes?

that seems to be implied as you have now shifted to complain about him spending us into oblivion. could you state it explicitly and clearly for us please?

My name is Lance wrote:

"..i am not tied to any particular mechanism of raising revenue. it could be a carbon tax, a VAT or other consumption tax, revenue from a cap and trade system.."

Not sure I follow why you feel the need for a 'mechanism'. You obviously feel the fed govt should have more of our money - as if $2T/yr. isn't enough to live on.. - so why don't you & yours simply write checks to the US Treasury? If paying more taxes is the responsible, fiscally sound thing to do, why do you sit back & wait to be forced to do so by some 'mechanism'? Put your money where your mouth is, comrade.

i was responding to sagarin, who is interested in a constructive conversation. he had said:

"So why don't we focus on growth? Fiscal reform and energy infrastructure that promotes growth? Raising taxes isn't really revenue, and, in fact, might bring in less revenue than closing loopholes and getting rid of subsidies would've. Revenue comes from a strong economy whereby everyone is participating and we don't need to fight about tax rates."

i was saying that i'm totally fine with raising revenue from "closing loopholes and getting rid of subsidies" as opposed to by raising rates. i just don't see how we can have a government that spends several percentage points of gdp more than it brings in, even when the economy is doing well.

in dollar terms, the last time the federal government spent less than $2 trillion was the 2001 fiscal year. even ignoring the increased spending (which is mostly due to the recession and retirees, and not due to new discretionary spending) during obama's term, in the 2008 fiscal year the federal government spent $3 trillion.

so yes, i don't think that $2 trillion is enough to live on. and given that the federal government is expected to spend $3.8 trillion this year, you are advocating a nearly 50% cut in federal government spending if you think $2 trillion is sufficient revenue.

of the $3.8 trillion, $716 billion is national defense spending, $485 billion is medicare, $108 billion is unemployment compensation, $113 billion is food stamps, $130 billion is veterans benefits and services, $225 billion is net interest payments, and $780 billion is social security (and i think medicaid is within the category labeled "health care services" which is $324 billion). This is all from table 3.2 at the link below.

in sum, defense + medicare + (what i think is) medicaid + social security = $2.3 trillion. so even before you get to ANY other spending - running the judiciary and legislative branches, for example, probably must be funded, right? - you are already $300 billion over your $2 trillion threshold. so again, more emphatically, $2 trillion is clearly not sufficient revenue.

Increases in Federal Spending:

Reagan: +9.9%

Bush II: 16.5%

Obama: 9.9%

if that is 'barry spending us into oblivion,' then what did Georgie the second do? Spend us into annihilation? Not sure what word you are looking for, but it has to be something really, really awful.

http://blogs.ajc.com/jay-bookman-blog/2012/10/16/so-how-much-has-obama-increased-federal-spending/

Please remember that Congress controls the purse strings. The President only spends what Congress allows him to spend.

Mr. Moneybags wrote:

Please remember that Congress controls the purse strings. The President only spends what Congress allows him to spend.

from 2003-2007 (most of bush 2) the GOP controlled house and senate and white house. The GOP really can't be trusted on spending. They did this.

house/senate was divided during Reagan's time.

Not targeting you agip, but arguing about how we "got here" is really fruitless, given the dire situation of our debt problem. We are stuck between that proverbial rock and a hard place where we really can't afford to raise taxes, but we can't afford to cut them either.

I think the trick lies in revamping the tax code to close loopholes and get rid of exemptions and subsidies, whereby we might even be able to get away with a small reduction in certain rates, which, if made PERMANENT along with scaled back, SMART regulation, would potentiate economic growth. If we tapped our resources, we could create millions of jobs, and we could get on the glide path that Simpson-Bowles was suggesting, such that we could backload spending cuts/mergers of Federal departments etc.

We could also go to a complete consumption tax that exempts the necessities of living so it's not overly regressive and truly "soak the rich." We could lower the exemption on inheritance, making more of it subject to taxation and increase the amount of salary subject to social security taxation, but only as a compromise to get the spending reduction and reform we so desperately need. Entitlements and interest eat up so much of the budget that not revamping them now would be foolhardy. That's what I want the debt-ceiling negotiation to be about.

I think what some people are arguing here is that at some point, we have to rein in spending, because the overwhelming tendency of fiscally non-conservative democrats and republicans is to raise taxes, only to find more ways to spend them.

But lacking the political will to do anything of import, I say we just wack 10% of every department, just like in the private sector. No exceptions, including defense. Austerity is what got us out of the deep but rapid depression of 1920-21, Harvard economists Rogoff and Reinhart have warned about the bang point when debt reaches 90%+ of GDP, Berkeley economist Christina Romer, formerly of Obama's economic council, has published a paper about how raising marginal rates is contractionary, and the McKinsey Global Institute concluded that, of about 35 countries in the same deep doo-doo we're in, 75% of them needed austerity to get there way out of the crisis, and the other 25% were relatively small and could devalue.

I wouldn't conclude that Obama is a big spender in relative terms, but I would also not classify him as someone looking to fundamentally reform how we spend our money. Obamacare was just another expansion of the entitlement state. We could've done better. I don't think the Great Society was such a great idea. Some form of it sure, but safety nets tend to promote the need for more safety nets. And Obama just undid the work requirement provision of Clinton's welfare reform. I seriously think this guy wants the record for the lowest labor force participation rate ever.

Like I said, sell Alaska and/or sell Hawaii. I'm not being facetious. Just because we have the world's reserve currency doesn't mean it's going to stay that way for long.

Sagarin -

I get irritated when people falsely accuse Obama of things. Fact is, he is a placeholder president - moderate in just about everything but not a great leader of a country.

As for how to solve the long term crisis - it seems to be about growth and medicare. If we can get 3% real growth from the economy and at the same time hold down medicare, we are probably ok. I don't have a clue how to do that other than start ratcheting up medicare eligibility ages.

THat will have unintended consequences also - putting off procedures, putting more people on medicaid...

In the end we have to grow and keep fed spending to that magic 18% of GDP. Can be done - but it takes a set of leaders, and I don't see them in DC.

Maybe Christie from NJ can do it - he has a terrific way of telling hard truths to people. He is the only politician I believe everything he says.

SS is a "wildly successful" welfare program? WTF? Where do you dream up this stuff? Mom's basement?

What gobbley gook are you talking about with it takes a village to raise an old person?? It shouldn't be the fed govt's business to mandate participation in a ponzi scheme - which is EXACTLY what SS is. There's nothing constitutional about it and only a moron could desribe it as successful.

If I'm a successful 40 yr old producer that earns say $200k/yr., SS is a horrible deal for me. And what happens to my ponzi scheme share of the pie if I die at age 61?

Your source may as well be Pravda or the White House. WTH is wrong with you?

And crediting SS with decreasing poverty rates for old people is like crediting Medicare for advances in medical technology over the last 50 years or crediting the food stamp giveaway program for more efficient farming methods.

Dimwits like you believe the fed govt is some benevolent life force that exists to help humanity and make our lives better. You're dangerously stupid because of your increasingly growing numbers - sheep incapable of independent thought. You're obliviously dragging the rest of us down the drain with you..

holy cow. I give up. It's like arguing with a retarded kid. What's next - barry is a foreign policy whiz? Barry leads the most transparent, ethical admin ever? Barry the deficit hawk? Barry the brilliant economist? Barry killed Bin Laden with his bare hands?

Of all the countless fiscal nightmares administered to by Congress, you chose social security to make your point? That blows me away.

The only certainty in the debate between yourself and katainen is that he appears comfortable citing statistics to support his arguments and you prefer to dismiss statistics - and historical fact, and arithmetic - to rely instead on unsubstantiated claims and personal attacks to make your point. I can tell you that your line of argumentation is less than convincing. Can you not answer one of his questions with an answer based in fact? I can think of many, most of which break down under closer scrutiny, but at least defend your stance man.

where did I go? I have a j-o-b. You should look into one for yourself.

You're counting tax cuts the obama way, i.e. a renewal of an existing tax break is a 'tax cut', not moving to end a prior tax break is a 'tax cut', temporary tax cuts that have already expired are still being touted as tax cuts, etc. Hell, barry even claims the Bush tax cuts as his own, even as he criticizes them as tax cuts for the rich & tries to end them.

Even tax deductions for businesses that only see a break if they purchase something, i.e. health insurance, are counted by barry as 'tax cuts'.

And lemmings like you just spoon that stuff up..

If you wanna talk about 'grand scales', let's talk debts & deficits..

i'm so tired of all the arguing